# Mitigating Hallucination in Financial Retrieval-Augmented Generation via Fine-Grained Knowledge Verification

arXiv: https://arxiv.org/abs/2602.05723 · HTML: https://mlsanity.com/paper/2602.05723/

## Key facts

- Cited by 1 papers in the map (data through 7 Oct 2026).
- Placed in Legal and financial RAG, one of 15 directions in Retrieval-augmented generation.
- Builds on 21 of its 25 references that are in the map.
- First posted on arXiv 5 Feb 2026.

## Placed in

- Retrieval-augmented generation / [Legal and financial RAG](https://mlsanity.com/rag/legal-and-financial-rag/)

## Builds on (most cited first, 21 of 21)

- [The Llama 3 Herd of Models](https://mlsanity.com/paper/2407.21783/) (2024)
- [Retrieval-Augmented Generation for Knowledge-Intensive NLP Tasks](https://mlsanity.com/paper/2005.11401/) (2020)
- [DeepSeekMath: Pushing the Limits of Mathematical Reasoning in Open Language Models](https://mlsanity.com/paper/2402.03300/) (2024)
- [Qwen3 Technical Report](https://mlsanity.com/paper/2505.09388/) (2025)
- [DeepSeek-R1: Incentivizing Reasoning Capability in LLMs via Reinforcement Learning](https://mlsanity.com/paper/2501.12948/) (2025)
- [DeepSeek-V2: A Strong, Economical, and Efficient Mixture-of-Experts Language Model](https://mlsanity.com/paper/2405.04434/) (2024)
- [Active Retrieval Augmented Generation](https://mlsanity.com/paper/2305.06983/) (2023)
- [Search-o1: Agentic Search-Enhanced Large Reasoning Models](https://mlsanity.com/paper/2501.05366/) (2025)
- [R1-Searcher: Incentivizing the Search Capability in LLMs via Reinforcement Learning](https://mlsanity.com/paper/2503.05592/) (2025)
- [DeepResearcher: Scaling Deep Research via Reinforcement Learning in Real-world Environments](https://mlsanity.com/paper/2504.03160/) (2025)
- [Chain-of-Note: Enhancing Robustness in Retrieval-Augmented Language Models](https://mlsanity.com/paper/2311.09210/) (2023)
- [ReSearch: Learning to Reason with Search for LLMs via Reinforcement Learning](https://mlsanity.com/paper/2503.19470/) (2025)
- [XuanYuan 2.0: A Large Chinese Financial Chat Model with Hundreds of Billions Parameters](https://mlsanity.com/paper/2305.12002/) (2023)
- [Enhancing Noise Robustness of Retrieval-Augmented Language Models with Adaptive Adversarial Training](https://mlsanity.com/paper/2405.20978/) (2024)
- [Why So Gullible? Enhancing the Robustness of Retrieval-Augmented Models against Counterfactual Noise](https://mlsanity.com/paper/2305.01579/) (2023)
- [Auto-RAG: Autonomous Retrieval-Augmented Generation for Large Language Models](https://mlsanity.com/paper/2411.19443/) (2024)
- [DeepRAG: Thinking to Retrieve Step by Step for Large Language Models](https://mlsanity.com/paper/2502.01142/) (2025)
- [DianJin-R1: Evaluating and Enhancing Financial Reasoning in Large Language Models](https://mlsanity.com/paper/2504.15716/) (2025)
- [BizFinBench: A Business-Driven Real-World Financial Benchmark for Evaluating LLMs](https://mlsanity.com/paper/2505.19457/) (2025)
- [R3-RAG: Learning Step-by-Step Reasoning and Retrieval for LLMs via Reinforcement Learning](https://mlsanity.com/paper/2505.23794/) (2025)
- [Adaptive Query Rewriting: Aligning Rewriters through Marginal Probability of Conversational Answers](https://mlsanity.com/paper/2406.10991/) (2024)

## Built on by (most cited first, 1 of 1)

- [BALTO: Balanced Token-Level Policy Optimization for Hallucination Mitigation](https://mlsanity.com/paper/2606.15893/) (2026)

## Abstract (arXiv)

In financial Retrieval-Augmented Generation (RAG) systems, models frequently rely on retrieved documents to generate accurate responses due to the time-sensitive nature of the financial domain. While retrieved documents help address knowledge gaps, model-generated responses still suffer from hallucinations that contradict the retrieved information. To mitigate this inconsistency, we propose a Reinforcement Learning framework enhanced with Fine-grained Knowledge Verification (RLFKV). Our method decomposes financial responses into atomic knowledge units and assesses the correctness of each unit to compute the fine-grained faithful reward. This reward offers more precise optimization signals, thereby improving alignment with the retrieved documents. Additionally, to prevent reward hacking (e.g., overly concise replies), we incorporate an informativeness reward that encourages the policy model to retain at least as many knowledge units as the base model. Experiments conducted on the public Financial Data Description (FDD) task and our newly proposed FDD-ANT dataset demonstrate consistent improvements, confirming the effectiveness of our approach.